On September 12, 2024, DR Kontant broadcast a program entitled “When the lawyer inherits the most” about estate administration in deceased estates. The program focused on how estate administration is carried out in Denmark, and the role of the lawyer. I must first state that it is my experience that the vast majority of lawyers who deal with estate administration do so both thoroughly and as far as possible to fulfill the deceased's wishes regarding the distribution of the inheritance.

But why do you actually use an estate administrator, and how does the estate process work?

When a person dies, it is crucial that the assets of the estate are distributed correctly and in accordance with the law and any will. An executor can step in to ensure that this process proceeds according to the book. Especially in complex estates where there may be debts, assets abroad or disputes among the heirs. The executor has an important role as a neutral party who not only looks after the interests of the heirs, but also ensures that creditors and the state's claims are met.

In most cases, the executor can be appointed by the heirs jointly in a private probate. However, in a number of cases it is now necessary for the Probate Court to appoint the executor, for example where the heirs cannot agree on a specific person to take on the role. According to the Competition Council, this is done in 12% of all estates.

How is estate processing carried out?

When an executor is appointed, there are several steps that are followed. First, information is obtained about the values of the estate, including property, bank accounts, shares and other assets. Then, these values are assessed and realized so that the estate can be settled and creditors paid. Finally, any surplus funds are distributed among the heirs. This is often a lengthy process that requires careful documentation and ongoing reporting to the Probate Court.

Still, one cannot help but consider whether the market for estate administration can be optimized.

In 80% of the executor estates, it is the Probate Court that appoints the executor from among the court's own representatives, while other actors are excluded. And there is a big difference in how many the individual judicial district appoints. For example, in the Randers judicial district (which has the fewest executors apart from Bornholm), there are 4 executors (out of 101 registered lawyers in the judicial district according to the Lawyers' Key and 267,000 citizens). In comparison, the Court in Nykøbing Falster has 11 executors (out of 35 registered lawyers and 146,000 citizens).

In January 2021, the Danish Competition Council made a number of proposals to improve competition in the legal profession, including in estate administration:

1. Authorization as an executor is made industry-neutral and is granted to anyone who meets the requirements.
2. The circle of authorized executors is appointed more frequently and on the basis of competition between the applicants, and executors for the specific executor's estates are chosen according to transparent allocation criteria - and as a starting point by the heirs.
3. The executor's fee must be disclosed before the executor is selected.
4. Investigation of the need to change the rules for when an estate must be handed over to an executor as an executor's estate

Increasing competition in the area of estate administration could be a way to ensure better and cheaper solutions for citizens. As it stands now, it is a relatively fixed structure, where the same few people are appointed as estate administrators, which limits competition.

I agree that some experience may be lost during the transition phase as the circle of candidates for the tasks is broadened. But the advantages of a more transparent system for estate administration are obvious, and of course the same quality requirements for estate administration must continue to apply as before.